The Washington Post reports that Virginia is seriously studying the prospect of issuing its own money. The idea of a state currency, unthinkable only a few years ago, has now become eminently thinkable.

Virginia Del. Robert G. Marshall fears that a financial apocalypse is coming and only one thing can save the Commonwealth: its own currency.

The idea that Virginia should consider issuing its own money was dismissed as just another quixotic quest by one of the most conservative members of the state legislature when Marshall introduced it three years ago. But it has since gained traction not only in Virginia, but also in states across the country as Americans have grown increasingly suspicious of the institutions entrusted with safeguarding the economy.

What has changed is faith in the federal government, not just in Virginia but in a growing number of places. The lack of faith in the competence of government — and the soundness of the dollar — has been growing leading some states to create contingency plans in case the currency goes bust.

So far, only Utah has approved a law recognizing nontraditional currency. Four other states have bills pending this year. Marshall said he is unsure of his proposal’s prospects in the Virginia Senate. One Democrat derided it as a descent into “la-la land.”

But the fact that the debate is happening at all reflects a deep-seated distrust in the very foundation of the country’s economic system — the dollar.

Marshall’s proposal would create a 10-member commission to study “the need, means, and schedule for establishing a metallic-based monetary unit to serve as a contingency currency for the Commonwealth.” This mirrors a rising trend in the availability of quasi-money. Economist Bernard Lietaer points out that there are already various forms this available. “For example, he said, there are 50 trillion airline frequent-flier miles in circulation, far surpassing the number of dollar bills.” FTAlphaville at the Financial Times describes the emergence of parallel money in Kenya.

While this may leave the system exposed to the corporate fortunes and bankruptcy risk of its owner, we’d argue that doesn’t need to be a bad thing. Who says money has to be centralised at all? Looking to history, central bank money is actually a relatively new phenomenon, pre-dated by private money systems.

People want it as a hedge or insurance in case the major currency system goes down. One way to think about a parallel money system is by imagining that the dollar became worthless tomorrow. But even without a dollar if you could obtain airline flights or get a case of beans, flour or ammunition by participating in an points system you could survive for a while — as long as the institution that issued the points kept functioning. Today Amazon announced that it was launching a kind of “virtual currency”.

Amazon, the world’s largest online retailer, plans to introduce virtual currency that can be used for purchases on the Kindle Fire tablet to entice more developers to create programs for the device.

Starting in May, consumers in the US will be able to use Amazon Coins to buy applications and virtual merchandise sold within games, the Seattle-based company said today in a statement. The company will give customers “tens of millions of dollars” worth of the currency, which will be accepted in the Amazon Appstore.

Anyone receiving payment in Amazon coins would theoretically be able to live entirely within the economy of the retail giant. Presumably the Amazon coins would entitle him to purchase MRES, canned bacon and anti-radiation pills and whatever else is on offer at Amazon. If the rate of inflation within the Amazon world was lower than that in the bricks and mortar universe you might hold rather more Amazon coins than dollars.

Of course the reason for the sudden interest in quasi-money, parallel money, virtual currency, guns and all the rest of it is fear. That fear springs from the perceived incompetence of the political class. An administration which seems increasingly unable to control the borders, defend its diplomatic missions, defeat al-Qaeda, checkmate the Muslim Brotherhood, balance the budget, raise sufficient revenues or do anything much, except demand more power, can pretend to be omnipotent. But people notice it has feet of clay when even North Korea is laughing at it.

Under those circumstances people naturally wondering whether they can keep relying on it for their essential safety and well-being. Recently the Chicago Police Department announced that it would no longer respond “in person” to 911 calls, allegedly in order to free up policemen to fight crime.

Officers will be dispatched if a suspect is still at the scene or is expected to return immediately, the victim is not considered safe or needs medical attention, an officer could make an immediate arrest or an officer is needed for an immediate investigation, McCaffrey added.

Otherwise the cops will take the 911 report by phone. This is as close as any major city’s police department has come to saying no mas, no mas. They’re not coming out for the bell, preferring to concentrate on the vital job of tracking down those “high powered magazines” that are threatening the fabric of American society.

The administration is no longer making an effort to hide its competence deficit. Brett Stevens at the Wall Street Journal notes with amazement that Chuck Hagel’s backers are justifying his lack of aptitude by saying that other people will tell him what to do. “It says something about the political state of play that Mr. Hagel’s defenders are now whispering that he just won’t matter all that much. Serious defense policy will be run by the grown-ups in the White House, people like Ben Rhodes, Valerie Jarrett, Denis McDonough and, of course, the president.”

Michelle Rhee has actually come out and declared “My Break With the Democrats” in the Daily Beast because she can longer oppose school vouchers with a clear conscience. For years she had been trying to convince herself that public education was perfect on all counts but for the sole defect that it didn’t work.

Here’s the question we Democrats need to ask ourselves: Are we beholden to the public school system at any cost, or are we beholden to the public school child at any cost? My loyalty and my duty will always be to the children.

Not everyone bought it. In fact, most of my Democrat friends remained adamantly opposed to vouchers. It was interesting, though: they were always opposed to the broad policy, but they could never reconcile their logic when thinking at the individual-kid level.

She had also discovered the competence deficit. The Democratic support system was still handing out its brownie points but they were worth less and less. Sooner or later the system becomes incapable of rewarding its own supporters. Rhee may have reached that point where she’s starting to feel the Titanic head down.

How deep does the incompetence go? As far as the dipstick will reach. Reuters has just reported that Anonymous has hacked the Federal Reserve. “Though no critical functions of the U.S. central bank were affected by the intrusion,” anonymous did manage to access the “personal information of more than 4,000 U.S. bank executives, which it published on the Web.”

When the Central Bankers can’t even defend their own personal information one has got to wonder what they can defend.

The fundamental problem with the Chicago school of “we won” politics is that it so disproportionately rewards the hacks, scoundrels, mediocrities, pitchmen, liars and swindlers who have a talent for conning low-information voters that it eventually delegitimizes itself. It turns itself into a big shambling joke. The final result of this style of power-grabbing is total corruption and total incompetence. “We won” is inevitably followed by “now what?”

I wish my home state of Colorado would follow Utah and Virginia’s lead. But we have a Democrat governor, Democrats control both houses of the legislature, and the Republican Party here is Institutional Republican, so I live in a one-party state.

The existence of a sound state scrip will ease the transition from the obvious first local step after the collapse of the currency; barter for necessities. I suspect that in addition to precious metals, ammunition and staple foodstuffs will become units of exchange. Ability to produce these will be the equivalent of the ability to mint your own coin.

I say local, because the inability to guarantee both payment and transportation is going to make supply chains collapse. Urbanites believe that stores automatically refill with the swipe of an EBT card. The disproof of the belief is going to be …untidy. State scrip will ease the transition from a local to a regional base. The rate of exchange between a notational Colorado “Rocky” and a Texas “Alamo” will have to be worked out, largely based on comparative economic advantage.

The recovery of the “Districts” will be hampered by the insistence of “Capitol City” that they be in control, however parasitic and counterproductive as it may be. The resolution of that will also be …untidy.

The key word for Utah and Virginia is “metalic” that is, when a “Scrip” can be exchanged for a “metal” it is actually no longer Scrip but currency, actual money.
Utah authorized a gold backed money. Figuring out the exchange value between say one State’s gold backed and another States silver backed wouldn’t be all that difficult given access to commodity market prices that modern communication allows. I wouldn’t be surprised to see gold and silver coins return. West Virginia could probably go with a corn whiskey backed currency based on proof of the whiskey..that’s a joke son, just a joke.

The US Constitution was created precisely over the issue of state issued coinage and paper notes — and all of the other consequences to mercantilist impulses which almost had New York fighting Pennsylvania.

So, it expressly prohibited the several states from coining specie — or issuing notes.

Hence, the issuance of either is a death stroke for the US Constitution.

======

Even commemorative coinage is struck by the US Mint — for the states. They’re not allowed to even go that far.

The US Constitution also prohibits any state from paying its bills in anything other than gold, silver or US (Federal) currency.

Not withstanding that, California, and others, have danced around the prohibition by stiffing contractors with IOUs.

Jefferson had been stiffed by the hyper-inflated Continental Dollar. He wasn’t alone. Hence, all of the Founders did everything they could to frustrate fiat currency — and money printing by any government entity: Federal or state.

Haven’t we been told the Constitution is just an ancient document written by racist white Europeans. Maybe they’re right or maybe they will change their minds when a Texas dollar will buy a loaf of bread and a fistful of Federal Reserve toilet paper won’t.

The states that have the most trusted money will do all right and the rest will either adopt the money of nearby strong state or have a really tough time. If this should happen some states will have to make drastic changes or they won’t survive. Look at Somalia for how California will look.

This is the inevitable result of the banksters being allowed to run hogg-wild with their derivatives for the past twenty years.

And this, sadly, is why Bernanke’s printing endless Bernankebucks won’t work: corruption. The banksters just rent-seek on the whole flow, until the dollars are worthless, at least the few that ever get down to the likes of you.

I know others will say any fiat money system must fall this way. Perhaps they’re right.

But more than that I agree 10000000% with wretchard, it is the competence deficit and delegitimizes government, not some economic voodoo, that is the big picture here.

It slides downhill fast – if federal dollars don’t matter, why pay taxes, and without taxes, all the government has is Bernanke and his printing press, and we go Weimar/Zimbabwe, but how any semblance of a modern economy could work if that happened is beyond imagination, oil and food on a cash-only, gold-only basis? Then electricity fails, and away we go – Rand had it right, when the lights of Manhattan, or perhaps the Superdome go out, it’s all over.

is a good review of the phenom in the mainstream press from last year. Note the killjoy at the end, “”Having 50 Feds” could debase the U.S. dollar and even potentially lead the country into default, he (one David Parsley) said. “The single currency in the United States is working just fine,” said Parsley. “I have no idea why anyone would want to destroy something so successful — unless they actually wanted to destroy the country.”

Dumb jackass! It’s the progs/Leftists who’ve been doing that for ages now.

I think the whole process is an example of “faith manages”, as Delenn used to say in Babylon 5, or no matter how idiotic the idiots in the MSM/Federal apparat try to dumb us down and box us in, there is simply too many clever people around who will find a way around their roadblocks. We’ll manage, somehow.

Too bad the Left isn’t clever enough to stave off what’s coming to them.

I’m currently reading Fehrenbach’s Lone Star, which is a history of Texas, and just finished Warwolf, a tale of the Thirty Years War . If you haven’t yet, pick them up and read them.

Eery parallels to the times we have now during Reconstruction Texas. Autocratic and sadistic federal control within, savages and Mexicans attacking at the borders, and the same needs to have some means of exchange that everyday people could use. That Texas survived as an entity was kind of a miracle and not very certain.

The U.S. needs a miracle now.

Also very scary story in the second book. A tale of a civilized, Christian land descending into what was for the time a Mad Max era, people from the same culture and language engaging in the worst (!) behavior towards each other for decades, due to extreme political divide. Same economic depression, with the means of production devastated and the average man impoverished by having nothing to trade.

As far as the competence deficit goes (a concept with which I am in 100% agreement), it continues forever until collapse if we allow the guild mentality, tenure, and the concept of forever guaranteed public paychecks for little added value to continue to grow, along with continued government approval of financial-skimming rent seekers whose “facilitation” is vastly overvalued and whose behavior and lack of ethics are sucking money out of the economy and slowing it down as Josh pointed out. All of these institutions allow mediocre and incompetent people to thuggishly extort money away from the truly productive at a rate not possible otherwise.

My comment last Boxing Day on the “Final Performance” thread seems worth recycling.

Has a Situational Enabler and Recycled Conceptualization Distributor yet to sell our host on the many benefits of relocating the Belmont Club to Second Life? It would not surprise me in the least to discover that our budget is now balanced in Linden Dollars.

James Blish in his “Cities In Flight” series predicted a future where pharmaceuticals became the basis for money.

Socialists use many tools in their quest for power. One method is to debase people. The very idea of Competence can be made heretical. To convince everyone that “We’re all Bozos on this bus” for them is not a bug but a feature.

I have been thinking along these lines for some time. Given the tsunami of destruction that is approaching these shores from our explosion of debt, lovers of all things Government (progressives, Libs, socialists, what have you) should be retreating to some defensible perimeter of SMALLER government. Instead they have pushed on for more power and control and are now far beyond their supply lines. The collapse approaches.

It was mind boggling to watch them fight for Obamacare, using every parliamentary trick and bribe to drag the legislation across the finish line, giving us an enormous new entitlement program when the ones that we already have are rushing to insolvency. [At the risk of invoking Godwin's law] It was like the Wehrmacht giving the final extreme effort to take Stalingrad, not realizing that the entire army was trapped. When the trap was sprung, the collapse of the front began, inexorably ending all the way back in Berlin.

Trust is the ultimate currency for a government or leadership. They have completely squandered our trust in them. Geithner not paying his taxes, Charlie Wrangell owning 6 rent controlled apartments, Benghazi-gate…..too many scandals to recount.

I suspect that there are millions who have “gone Galt”. Why wouldn’t they. I think that there are so many people who would sacrifice to put this country back on the tracks if our leaders were brave enough to lead us in that direction, e.g. we are going to raise taxes and cut spending to balance the budget and pay down the debt. But instead, they continue to piss our money away on circuses and criminality and I think the producers say “why should I keep paying for this?” and the takers say “why shouldn’t I keep getting mine?”.

In the novel I’m writing (still) they create a new currency based on the penny. Hyperinflation is about to take off and one guy decides to acquire pennies. They have stopped making the penny because it is worth too little. But this guy says no, they stopped because it is worth too much. This fellow assumes the penny is made of copper but actually it is made of zinc, so the joke’s kinda on him.

Later they switch to gold but the gold was debased by tungsten.

Finally it evolves into an “obligation” based currency. Haven’t quite worked out the particulars of that.

Back in the early 90s I was in the transition USSR/Russia during their bout with hyperinflation. What is of interest, here, is the “free” stores that had price labels on the shelf indicating the price of the product in several currencies: US$, Pound Sterling, Duetchmark, Swiss Frank, Lira and Ruble. At the bottom of each label was the time the price was set that day. Since the Ruble was in hyperinflation, to purchase in that currency required the cashier to calculate the time from the label and increase the price according to the time of purchase. Should we devolve to that system this is what one can anticipate the retail economy to become.

If the public sector were competent and, more importantly, restrained from interfering, then the invisible hand would make sure that the financial skimmers who were dishonest and incompetent would wither on the vine.

This time it can be worse because we are in an uncharted territory. So far history shows what happens when currency is debased in ONE country (or region). Planet-wise debasement never happened before. The only weak analogy might be the fall of Rome. Or… “Foundation” series. Or… various dystopian novels like “Domestic enemies”. Etc.

It seems to me that the States need to agree on an alternate currency with a commonly recognized intrinsic value. For Constitutional/ legal reasons they may choose to call it something else, an “investment” vehicle perhaps, but the machinery could be in place to transition to a new money the moment the old money fails; fifty different dollars maybe, but all with the same purchasing power.

Wretchard – Even more than a competence deficit, which can be addressed through consultation with others, particularly subject experts, we have a Deficit of Trustworthiness.

No one person can know everything. Some know so much about a subject that they end up knowing everything about nothing, others know a little bit about a very broad range of subjects, and end up knowing nothing about everything, and a very few are today’s Renaissance (Wo)Men, who know enough about damn near everything to “Git ‘er done”. The historical number of elected officials within that select group is tiny. That’s why we have groupings such as a Senate, House and Cabinet.

The problem is that we have some extremely untrustworthy people in positions of power (Obama and Harry Reid spring to mind) and the traditional check upon them, the Press in First Amendment terms, has turned into a bunch of puppy lapdogs who could not “SPEAK TRUTH TO POWER”, even if it was to tell Michelle Obama that they love her new hairstyle.

So what we need is a new media, something where experts can gather and discuss the issues of the day, something like…

The Belmont Club

Thank you for being our host!

It would be quite interesting to have the Republicans form a Rump Cabinet something like this

There are no commentators in the media, particularly on TV, in a class with that line up, to speak truth to power. The house experts (e.g. Dick Morris at Fox) are not worth the money they are paid, not by a long shot. They are mostly shills for books they have written, doing the work for a plug, just like actors did on the Johnny Carson Tonight show.

As to economic policy, in a manner akin to how the Democrats harken back to the Clinton era, Republicans ought to harken back to the Eisenhower era. Low, but non-zero Fed funds rate (3%?) to reward savings accounts. Twenty year mortgages, not 30 year ones, with 4% interest rates to help homeowners build equity. The bank borrows from savers at 3% and lends to home buyers at 4% to cover its cost of operations.

Tougher credit standards, such as making a new credit card holders have cash in the bank for the first year, until they prove themselves credit worthy. etc. etc.

Actually, I think that the value of a genuine Confederate dollar passed that of the U.S dollar some decades back.

Make you wonder, what if we put a price tage on government decisions? We do that now locally with things like additional sales taxes for schools, which failed in our county. And I recall that when I lived in N. Virginia the Fairfax County employees were simply enraged when certain restaurants (e.g., Chili’s) successfully opposed additional taxes on restaurant bills and vowed never to eat there again.

But suppose we went National with that idea, for example, just after 9/11/01:
VOTE:
1. Invade Afghanistan and modernize it: $XXXB
2. Nuke Afghanistan down to the bedrock: $XXM

I know which one I would have voted for. Get Gen Ripper on the red phone.

Could that kind of “Green Eyeshade” mentality produce any worse results than we have? And it will become necessary, eventually.

The inability of women in rural Egypt to clean their breasts is causing a diarrhoea epidemic, according to the country’s Prime Minister Hisham Qandil.

Qandil was speaking about the spate of recent epidemics in Egypt’s rural communities. During the address, he said he had witnessed children suffering from diarrhoea immediately after they have been breastfed because their mothers were unable to clean themselves probably.

He added that many women in rural Egypt don’t even bother to clean their breasts at all before feeding their toddlers.

“The fundamental problem with the Chicago school of ‘we won’ politics is that it so disproportionately rewards the hacks, scoundrels, mediocrities, pitchmen, liars and swindlers who have a talent for conning low-information voters that it eventually delegitimizes itself. It turns itself into a big shambling joke. The final result of this style of power-grabbing is total corruption and total incompetence. ‘We won’ is inevitably followed by ‘now what?’”

Good luck with waiting on the droolers and “I’m OK, you’re OK” non-judgmental types to realize the Democrats are “illegitimate” (in more ways than one) and they as low-info voters have screwed the pooch. The Democratic Party has controlled the office of mayor of Chicago since 1931. Let’s see, 2008 plus 82 equals …

Problems with breastfeeding diarrhea was endemic worldwide few short centuries ago. And in most of the world even less than 100 years back. I understand that it sound strange, but I think it is good that he at least noticed it publicly.

Our host wrote: “The fundamental problem with the Chicago school of “we won” politics is that … it eventually delegitimizes itself.

That is the whole story, right there. Since our true-Red Marxist liberals have invested so much into their effort to gain control of writing the laws, one would have expected them to have a tremendous incentive to ensure the Sanctity of the Law. However, their behavior is just the reverse — from Teddie Kennedy’s unpunished homicide of Mary Joe to Geithner’s unpunished tax evasion to Congress exempting itself from SoeteroCare.

Here is the message for the rest of us — our self-described superiors hold the Law in contempt; we should follow their example. In fact, count the number of drivers you see exceeding the speed limit on your daily commute and it becomes apparent: we are now a nation, nay a world, of scofflaws. So let’s get on with it! Adopt a belated New Year Resolution to flip the bird to at least 3 laws every day.

When the Best & Brightest regain a little humility and start to honor the laws they themselves pass — in spirit as well as in letter — we can discuss cutting back to ignoring only 2 of their laws per day.

No, California is a descent into la-la land. It is little surprise that the confidence in government is so low. First there is a total melt down of consumer confidence due to government corruption, crony capitalism, and a failing economy resulting thereof, then you have things like this; ObamaCare costing many times more than “estimated”, 7 million being pushed out of private coverage, and 11 million illegals immediately to start coverage, to the head of the line while those who have paid into the system are being saddled with second class citizen status and a failing state with no safety net. This in itself demonstrates an unerring hatred toward American citizens, a status debauched, but the sad truth is, and everybody knows, it is all a staggering lie. 7 million is the tip of the iceberg, 11 million is more likely 22 million, and everything that this government decrees is in all probability a vicious lie calculated to defraud the American taxpayer.

We are beyond the declaration of war, we are at the phase where the fed’s are strategically shaping the battlefield, the least of which is a unconstitutional debasement of the 2nd amendment, they are disarming America by sapping it of its strength, stealing the money and giving it to the 3rd world masses who are being groomed to displace the hated European and their emancipated slaves. We are witnessing the mass pogroms of the fascist state to liquidate an unsavory, genetically unclean race. America is becoming a ghetto and the states are too late and too powerless to stop it.

Maybe, just maybe, there will be pockets of sanity but to maintain that sanity it would be necessary to cut off the federal government and to keep from being overrun by refugees. Latin Americans are natural communists and are natural allies to a fascist state. They will tell you that no US policy can be put forth without their prior approval and they would be right. They alone will determine the future of the United States and that of Europeans. Viva la raza!

And here in LA-LA Land, the police have made it clear that in case of emergency, their number 1 priority is protect themselves, then the infrastructure and political class which considers itself the most important part of infrastructure. And every agency has been stocking up for their war against Americans. Call it hording and prepping.

Have an emergency? Maybe there’s an app for that, call it Bend Over and Kiss Your Ass goodbye.

Your article provides a good opportunity to explain that the money problem arises from Congress’ unconstitutional assertion of the right to issue paper money and force people to take it as legal tender. Congress has enumerated powers, and those necessary to carry into execution the enumerated powers. The tender power was not among the enumerated powers. Thomas Paine said that any politician who even proposed a tender law should be immediately put to death.

In stating that no State shall make anything but gold or silver coin legal tender, the Framers were limiting the tender power of the States, in a context where it was obvious to all concerned that the United States had no tender power. After all, how could one rationally infer a federal tender power that conflicts with a state’s tender power? If a state makes gold coin the only lawful tender in perfect congruence with the Constitution, one cannot invoke the Supremacy Clause to force citizen to take Congress’ paper.

Congress’ paper money was obviously unconstitutional, and so declared by the Supreme Court, but a corrupted Court soon reversed itself on the question, leading to the then-famous work: Wounded in the House of its Guardians, by a Harvard history professor.

Iran has just announced that it is already a nuclear state. The report, citing Ahmadinajad, says he will formerly announce it in Cairo, the very place from which President Obama gave a speech declaring how he was going to repair America’s relationship with the Muslim world. Doing it in Cairo is like spitting in the President’s face. What is the President going to do about it? What can he do?

In other news, “the U.S. Postal Service, struggling under a financial load and facing tough competition, will stop delivering mail on Saturdays beginning this summer, officials announced.” Congress will be blamed.

The announcement, which had been expected, is seen as an attempt to force Congress to deal with the Postal Service’s increasing financial woes. Congress has tried to reorganize the agency, but efforts have been derailed because of politics.

Well what can government do? It can’t stop, er contain, er deter Iran. It can’t even deliver the mail any more like it used to because it can’t raise the money to do it. Not unexpected for an institution that couldn’t even pass a budget. But it can blame Congress. And doubtless Congress can blame the President.

It’s looking like a bloated, helpless giant that can’t teach kids to read in ten years, police the streets of Chicago or do anything worth a damn. And yet that doesn’t stop the administration and its supporters from making the most astonishing promises. You’ll get free phones. Julia will get free everything. Sandra Fluke will get free contraceptives or abortions. It will make a “grand bargain” with the Islamic world. Grand bargain? Do you remember the words? What about “smart adhocracy” or “war of necessity” or “electric cars”. Remember “free health care”?

Maybe not. But what about “low information voter”?

This is an administration that paid people to destroy automobiles. Promised to try then not to try Khalid Sheik Mohammed; promised to turn counterterrorism into a mere law enforcement problem.

Leaving aside the wisdom of these promises, the capability of it to deliver on anything is seriously in doubt. It talks very big, but as we see now, can’t even deliver the mail. Can’t respond to 911. Can’t stop Iran. And now it wants to police up all the “high powered magazines” as if that were the biggest, most important problem in the world. Right next to global warming.

And if now people stop taking its promissory notes, if the waiters start demanding cash, if the tradesmen stop delivery, what will it do? Print more promissory notes that’s what. If it prints enough to stop an outer space alien invasion, Paul Krugman assures us, then the critics shall be silenced and will be well.

No. All is lost already if he can think like that. For those who the gods wish to destroy, they first make mad.

The huge problem I see is the exchange of goods and services moderated by a non- Treasury backed currency (and all my paper dollars say Federal Reserve Note), and the possible tax repercussions with respect to reporting those exchanges to the IRS.

You may have a sound “parallel” currency, but the IRS could (and probably will with malice) destroy or wreck the value of a parallel currency, thus punishing those cheeky citizens that would have the temerity to trade in it. There was an essay written about “bitcoin” by Menscious Moldburg (huh?) at Unqualified Reservations a few weeks back.

The Federal Government is a jealous and idolarous pagan god, and will not suffer this sort of undermining of its authority, however cracked that authority might be.

The fundamental problem with the Chicago school of “we won” politics is that it so disproportionately rewards the hacks, scoundrels, mediocrities, pitchmen, liars and swindlers

The thing all these leeches have in common is, well, being leeches. They don’t have the faintest understanding of production, of how anything of value comes to be. It’s the Hunter-Gatherer mindset. Berries show up on a bush, you take them. It’s one reason they fall so hard for Keynesiansm (the other reason being, it’s an excuse for them to do what they wanted to do in the fistt place, like a quack selling an ice cream and pizza diet for fat people).

Our problem is over-specialization. We think we need professional politicians, bankers, lawyers, managers. Maybe in theory that would be good, but in practice it’s not the people who are the best managers who take these roles, but rather the people who are the worst workers. The worst producers. It’s common enough in engineering to be it’s own in-joke, the guy who ends up being the Engineering Manager is the guy you least trust to do any actual engineering.

Well, now we see it on a national scale. The people running our government are the worst citizens, the least capable of doing (or even understanding) a civic duty.

and as far as this goes:

The Democratic Party has controlled the office of mayor of Chicago since 1931. Let’s see, 2008 plus 82 equals …

Chicago is a perfect analogy to the grifters mentioned above – an entity that doesn’t produce anything but has found it’s way to a choke point where it can skim off the top, leech off the productivity of others. The reason that the “Chicago Way” doesn’t scale up and the reason the current state of affairs isn’t going to last another 82 years is there no host big enough for the entire country to leech off of.

oo, oo, call on me, call on me, (arm waves wildly over head)… I know the answer!
We copy, first, the Brits. (no one can sneer at the masses like the OxBridge set, ya’ know) and allow Sharia patrols in the streets. This gives women the ‘choice’ to conform, accept female circumcision or be beaten to death. Other minorities will be given similar ‘choices’.
Then with sharia firmly in place, we become Egypt, (All praise to Islam)where government bread will soon be limited to 3 little loaves or about 400 calories per day. Add to this the rise in dirty breast breast feeding we can kill both moms and babies, (starving moms don’t make much milk, and infant diarrhea dehydrates to the point of death.) Much cheaper than abortion and only applies to the lesser groups. Eugenics don’t ya’ know.
Finally we re-define success for the Education Sector. It now becomes ‘How many fail to read’. Thus we give them a smiley face for what the already do well; fail. We continue to over pay them.
Then, when the wheels come off we all hunker down and hope we have remembered to print hard copy of all the knowledge we need (power, much less the internet, takes a hit and is available only to those who…)
I suggest learning how to make gun powder (remember, it was done long long ago in smelly huts) and how to smith found metals from which to make stuff to trade for other stuff…. and so it goes all over again.

Republican Governors (the Current majority of state Governors) need to come to gather and declare the Federal Government in breach of the Constitution, give the Federal Government a reasonable amount of time to rectify the breaches (Budget, Presidential over reach, etc.) or the declare the current Congress and President null and void, voiding all laws and actions by the Congress that had not meant its Constitutional Duties, set a new date for new and complete elections of all Congressional seats and Presidents.

Lets see, while I’m dreaming here, 34 States call for a Constitutional Convention to repeal the Income Tax, specify term limits for all elected Federal Offices, Require all Federal employees and officers to live under the regulations and rules they impose on everybody else. Go Chile and privatize Social Security, Budget must be balanced every year. The currency must be backed by metal, Drug possession will be legal however drug use will be penalized, Belt fed and crew served weapons will be legal but use in the committing of a crime will punished with death, and etc…and a pony, I want a pony with a sleazy blond.

In May, 2012 Paul Krugman cited Matt Yglesias, among other proofs, as evidence that Argentina was doing well.

Matt Yglesias, who just spent time in Argentina, writes about the lessons of that country’s recovery following its exit from the one-peso-one-dollar “convertibility law”. As he says, it’s a remarkable success story, one that arguably holds lessons for the euro zone.

I’d just add something else: press coverage of Argentina is another one of those examples of how conventional wisdom can apparently make it impossible to get basic facts right. We keep getting stories about Ireland’s recovery when there is, in fact, no recovery — but there should be, darn it, because they’ve done the “right” thing, so that’s what we’ll report.

And conversely, articles about Argentina are almost always very negative in tone — they’re irresponsible, they’re renationalizing some industries, they talk populist, so they must be going very badly.

Maybe it’s an example of why economic forecasting is an inexact science; of why extrapolating nonlinear system is dangerous and why it may not be such a good idea to print money to forestall an invasion by outer space aliens.

There are limits to knowledge. Most of us know that. But our esteemed elite has forgotten that they too, can err.

Now Matthew Yglesias now writes that the lessons of Argentina do not apply to the United States. “A country whose primary immediate problem is on the supply side should look like Argentina, with high and rising inflation. Demand is chasing a fixed supply, so prices are accelerating. The USA since the crisis doesn’t look like that at all—it’s a place where both real output and the price level are below their pre-crisis trend because we have a demand shortfall.”

Yep. Just make it mandatory for every schoolkid to have an Ipad and all will be well. Managing the economy fails more often than not. Just now Spengler has a piece on hunger in Egypt.

“Even Islamists have to eat,” I wrote under the headline “Food and Failed Arab States” in February 2011. Egypt’s Muslim Brotherhood government takes a different view, the Washington Post reported yesterday. The trouble, the government says, is that Egyptians are eating too much. In a separate report, the government proposed to cut back its bread subsidy to three hand-sized loaves of pita bread per person per day, about 400 calories’ worth. A state that can’t feed its people is a failed state, and that’s why the Egyptian state is at the brink of collapse, as Egypt’s defense minister warned last week….

We are watching something unique and terrible in modern history, namely the disintegration of a society of 80 million people, with the prospect of real hunger–a self-made famine brought about by social and political disaster rather than crop failure or war.

For those who doubted it, the jury is coming in with the verdict. Wile E. Coyote does fall to the ground. He can’t keep running through the thin air. Price controls, narrative manipulation, propaganda and lies — all of these bounce off the impenetrable armor of reality. For an economy to work it has to actually work, not just work in the computer program of the bureau of labor statistics.

I think that the best basis for an alternate currency would be micro-commodity futures certificates in energy and grain. You might, for example, have a certificate the size of a standard dollar bill that can be redeemed for one gallon of gasoline. Others might represent kilowatt hours of electricity and some might be redeemable as a certain weight in wheat. Everyone needs energy and food.

Of course this would set off a huge domestic conflict. The source of money would essentially be taken away from the banks and the financial services sector as well as the Federal Government. You can’t turn computer entries into natural gas or wheat. And if it is required by the state’s law that actual deliveries of the commodities shall be made at a time specified on the certificates they can’t just be printed at will by the likes of the Bernanke or the Obama.

Re. # 35. JMH
“…there no host big enough for the entire country to leech off of.”
Most of natural systems in a first approximation can be modeled by a hunter(s)/pray(s) paradigm when there are usually 3 distinguishable states after transients: 1. hunter is so efficient that it kills all pray.. and than dies off for the lack of food – saber tigers, anyone? A.K.A. Asymptotic decay.
2. in large and not very pray-friendly habitat reduced prey density keeps hunters’ explosion in check. Indefinitely sustainable with relatively small local oscillations provided there are no external changes to the habitat.
3. When the pray has abundant and easy accessible food there are huge oscillations with substantial potential of rapidly sliding into #1. Buffalo hunting?

As blert@6 indicates, major reasons for the Constitution which replaced the Articles of Confederation were exchange rate problems for the separate currencies of different states and a very weak post revolutionary economy. Of course the amended Constitution had other purposes too, but as a way to improve the economy, the Constitution strengthened the central government and created a currency with a single exchange rate. I think that different states issuing their own currencies would make the present economic problems far worse.

It would be fun to come up with names though. Virginia, named after the virgin queen Elizabeth would naturally issue a currency called the Lizzie. Maryland, named after Elizabeth’s tall Scottish cousin could issue the “Long Scottie”. Louisiana being named after the French King Louis XIV – the Sun King – would issue “Sunnies” and so on until we reached the half century of separate state currencies.

It seems to me that talk of separate state currencies is simply a displacement activity being pursued as a way to avoid facing up to the real problems.

W @ 39 wrote (tongue firmly planted in cheek): “Just make it mandatory for every schoolkid to have an Ipad and all will be well.”

Let’s rewrite that to be more explicit: Just make it mandatory for every [US] schoolkid to have an Ipad [made in China] and all will be well [in China, for now].

Of course, the Chinese would end up with more irredemable IOUs from Pres. Barry. So maybe imported Ipads are not the route to a sustainable world.

Fascinating thing is that energy prices in the US are much lower than in many other places. In a theoretical world, Airbus would move its manufacturing plants from high-cost France to lower-cost US, and German chemical companies would move to Louisiana. It’s not happening. And the reason is — over-regulation by the Political Clique, which denies everyone the benefits of rational economics.

Kinuachdrach@44…”And the reason is — over-regulation by the Political Clique, which denies everyone the benefits of rational economics.”
While I used to, and to some extent still do, agree with this, I am having second thoughts. Many, if not all, the very large firms are TWANLOC. The over rated ivy MBA that fills the Democrat Supporting Financial Sector also inhabits uber large corporate America. These guys largely got their positions through despotism and inter-elite family cronyism. Modern big wigs don’t hire and accelerate their own families, they take on their old school chums children etc. It is best if there are three or four degrees of separation.
It also makes bribes easier, I overpay your child, who can purchase the ‘family’ vacation home, say, and you do me the favors I need because you have analyzed my needs and determined it to be the right thing. (It is really great if child has by marriage, divorce or selection, a different last name.)
I live in DC… the pols play the same game. Big entitled business elites are cut from the same cloth, and families, as the elite pols.
In Mexico they still deal with the ‘Hundred Families’ (some say forty) who, own the place… all European educated, pure European blood lines etc. (another note…don’t ever listen to a Mexican talk about racism until they are able to explain Mexico’s versions of it)
ta

“This is the inevitable result of the banksters being allowed to run hogg-wild with their derivatives for the past twenty years. And this, sadly, is why Bernanke’s printing endless Bernankebucks won’t work: corruption. … It slides downhill fast – if federal dollars don’t matter, why pay taxes, and without taxes, all the government has is Bernanke and his printing press, and we go Weimar/Zimbabwe, but how any semblance of a modern economy could work if that happened is beyond imagination…”

wretchard @ 39 said:

“For those who doubted it, the jury is coming in with the verdict. Wile E. Coyote does fall to the ground. He can’t keep running through the thin air. Price controls, narrative manipulation, propaganda and lies — all of these bounce off the impenetrable armor of reality.”

At first glance it looks like it will be a “melt up”, i.e. the DJIA goes to infinity while the value of the dollar goes to zero.

People like to point out that the DJIA in gold has been flat since Jan 2009, refer to the graph “DOW’s Recent Performance” at:

That graph seems reasonable since the serious money printing began in March 2009 and is clear proof that only money printing has been keeping our economy alive. Effectively that flat trace is the analog of Wile E. Coyote running through thin air.

The shear crookedness of the sub-prime real estate bubble was almost as obvious as the fraud behind the Dot Com. I saw the stock market collapse coming and was in a pure cash position prior to the crash in September 2008. I briefly went back into stocks in February 2009 but the whip-sawing caused me to freak out (lost $10,000 in a heartbeat) and went back to pure cash. That was a huge error because I never went back into stocks. Never in my wildest dreams did I think that Bernanke would engage in blatant money printing and continue to do so for so many years.

Do I get back into the markets when it’s at an all time peak? That seems like financial suicide. Bernanke could crash this market at his whim. Through the MSM, he’s probably trying to sucker retail investors back into the markets so he can pull his phoney cash out before runaway inflation sets in. This is a classic suckers trap. However Bernanke maybe in a trap of his own devising. He may not be able to withdraw his Bernanke-bucks from the marketplace or stop the printing presses. If that is the case then the DJIA will go to infinity and the US$ will eventually become worthless. What am I to do? How do I invest when the marketplace is utter fraudulent?

Different topic concerning fraud:

The German Education Minister Annette Schavan was discovered to have plagiarized her Ph.D. thesis. Refer to:

If you go to a typical classroom at my kid’s elementary school, you’ll see posters of George Washington, Abe Lincoln and Martin Luther King displayed on the walls. It’s appropriate that Washington and Lincoln are held up as role models and heros for our children. However Martin Luther King had a very mixed history including cheating on his wife and plagiarism of his Ph.D., refer to:

“An academic inquiry concluded in October 1991 that portions of his dissertation had been plagiarized and he had acted improperly, but that his dissertation still “makes an intelligent contribution to scholarship”; the committee recommended that his degree not be revoked”

“David Garrow wrote about a number of extramarital affairs, including one woman King saw almost daily. According to Garrow, “that relationship … increasingly became the emotional centerpiece of King’s life, but it did not eliminate the incidental couplings … of King’s travels.”

Why do we continue to hold King as a role model for our children and celebrate his birthday? Frederick Douglass is an honest-to-god American black hero. We should have Frederick Douglass’ poster on the walls of our children’s classrooms and be celebrating his birthday. Why do we ignore Frederick Douglass and instead celebrate a liar and rascal like King?

At this moment the Canadian Dollar is exchanging at almost exactly equal to the US dollar. Instead of creating a new currency, what would happen if a state started using loonies instead of greenbacks? If someone insisted on payment in US currency, an exchange rate would be readily available.

>Starting this week, Chicago police are changing their responses to 911 calls. They’ll no longer come right away to reports of things like criminal damage to property, vehicle thefts, garage burglaries, or other crimes in which the suspect is no longer on the scene, and the victim isn’t in immediate danger.

>The move will free up the equivalent of 44 police officers a day for patrol duties.

Soon, currency will be printed by banks and other local financial institutions, volunteer firefighters will take the place of the unionized municipal ones we have now, and Vigilance Committees will enforce the law in neighborhoods where the law is otherwise absent.

I’ve been predicting this would happen since I saw the San Fran PD give a de facto freaking ESCORT to an Occupy Wall Street crowd that trashed several cars and small businesses right in front of them, and did nothing, because they didn’t want to ‘escalate the situation.’ Even in SF, people will get sick of that sort of thing really quickly. And they will do what Americans have always done — self-organize at the grassroots level. It seemed obvious to me. But I never thought it would snowball this swiftly, and at the national level.

Quietly, on little cat feet, 19th century America is rebooting itself. And that might not be an altogether bad thing.

About a thousand years ago
The Chinese won the race
To change the way that money worked
And ultimately face
The fact that paper money would
In no time take the place
Of metal coinage and thereby
The currency debase
The Chinese printed theirs on silk
While others paper used
At first gold backed by one to one
Then gradually diffused
As governments soon realized
That people didn’t care
If gold or silver backed the scrip
So long’s they got their share
And so we’ve come full circle where
If anything gets sold
The buyer has to come up with
A shiny coin of gold

It seems that leaders and their manufactured cultures across the world have fallen into the classic trap of viewing people as the real units of currency; constituencies and voting blocs have become denominations; To be traded, hoarded, ‘saved’, invested, and spent in service of their whims.

Quick! commence having @ReginaldQuill and the other BigSis/White House online troll armies attacking the people and lawmakers of Virginia! ‘Neo-Confederates’! We need the new Obama Lincoln to crush the Johnny Rebs of Virginia and any hints of using anything other than pure Geithner/Bernanke signed fiat! Gold money and alternative currencies are Russian agitprop, plain and simple! I demand that BigSis round up the Virginia lawmakers who proposed state certified gold and silver coinage at once!

If ya’ll think I’m joking, take a look at this, from Doug Hagmann’s ‘DHS Insider’ source regarding that Obama has hired THOUSANDS of low to middle wage online drones to push his propaganda, including many who pose (according to Cass Sunstein ‘cognitive dissonance, anti-conspiracy’ doctrine as fake Right wingers to confuse and divide liberty minded folks).

“2. Fai Mao
If States are allowed and begin to issue alternative currency which is i think called “script” the Federal government is finished. Indeed the US is at that point finished.” It’s my understanding that the States are indeed PROHIBITED from issuing paper currency under the Constitution, as they printed too much money during the Articles of Confederation period, hence the phrase, “Not worth a Continental”. However, there is nothing in the Constitution that prohibits the states from regulating or recognizing online currencies such as Bitcoin, nor certifying precious metal coinage as 99% free from adulteration (in other words, to prevent BigSis and counterfeiters from destroying the alt-currency market with brass and tungsten gold coinage) and to set up State backed banks (i.e., North Dakota would be one considered very safe) with very strict lending ratios so as to create islands of stability within the banking system when the banksters trigger bank runs worldwide. In other words, create little state-backed fortresses against Jon “the Don” Corzine and his future successors simply looting savers’ accounts.

“The fundamental problem with the Chicago school of “we won” politics is that it so disproportionately rewards the hacks, scoundrels, mediocrities, pitchmen, liars and swindlers who have a talent for conning low-information voters that it eventually delegitimizes itself. It turns itself into a big shambling joke. The final result of this style of power-grabbing is total corruption and total incompetence. “We won” is inevitably followed by “now what?”
Nailed it Wrechard!

Finally the axe falls on Why do you think they call him Dick Morris. About time life caught up to that weasel.

1Though I speak with the tongues of men and of angels, and have not charity, I am become as sounding brass, or a tinkling cymbal. 2And though I have the gift of prophecy, and understand all mysteries, and all knowledge; and though I have all faith, so that I could remove mountains, and have not charity, I am nothing. 3And though I bestow all my goods to feed the poor, and though I give my body to be burned, and have not charity, it profiteth me nothing.
4Charity suffereth long, and is kind; charity envieth not; charity vaunteth not itself, is not puffed up, 5Doth not behave itself unseemly, seeketh not her own, is not easily provoked, thinketh no evil; 6Rejoiceth not in iniquity, but rejoiceth in the truth; 7Beareth all things, believeth all things, hopeth all things, endureth all things.

8Charity never faileth: but whether there be prophecies, they shall fail; whether there be tongues, they shall cease; whether there be knowledge, it shall vanish away. 9For we know in part, and we prophesy in part. 10But when that which is perfect is come, then that which is in part shall be done away. 11When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things. 12For now we see through a glass, darkly; but then face to face: now I know in part; but then shall I know even as also I am known. 13And now abideth faith, hope, charity, these three; but the greatest of these is charity.

The alternative to the US dollar is martial law. The feds are not going to allow the states to issue their own currency. It’s a ‘redline’ like land reform in South America. If the states actually try it, which they won’t unless and until fiscal collapse occurs, the feds will tell the states to immediately cease and desist with the threat of the US military to back them up. And, in a fiscal collapse scenario, the US military will back the feds. The ‘duly’ elected Constitutional government.

It’s certain that with martial law declared, in a fiscal collapse scenario that occurred before 2016, that Obama would look to extend that martial law and retain office. Democrats would perceive it as another opportuity to further transform the country even more fundamentally.

Yesterday on Fox News I saw an interview between Stuart Varney and a black US rep from, I think, Minnesota. The rep is recommending $1T in new taxes.

Varney asked him that the 62% in taxes that some people already are paying is “fair.” The guy replied that “Fair is not cutting off people from the food stamps they need.” Varney asked him what number was fair, was a 75% tax rate fair? The guy replied that “Fair is not cutting off senior citizens who are depending on their minimum social security payments.” And it went on like that.

So it is “To each according to his needs” and the “From each according to his ability” is variable, depending on the needs, not the ability. I think even Marx would have a problem with that.

The Cowardly Lion was played by Bert Lahr. Ed Wynn did play Uncle Albert in “Mary Poppins” (one of my favorite scenes). Ed Wynn was offered the title role for “The Wizard of Oz” but declined it. Ed Wynn would probably have been better cast as the Wizard of Oz even though Frank Morgan did a competent job.

RWE @ 61,

We’re now in the situation that Alexis de Tocqueville warned about, i.e. “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”

Historically this has always been the “Achilles heel” of democracy, i.e. demagogues seducing their way into power by offering the electorate free stuff.

It’s game over. All that’s keeping us going is inertia. Fortunately, we’re a big country and have lots of inertia.

given that the federal government is already essentially 100% incompetent, how is it going to materially interfere with states? once the majority of citizens decide that DC is not legitimate, the game’s over. there will be no army, there will be no fbi, etc.

#61,
Varney was just scratching the surface. 75% income tax on the ‘rich’ is the beginning. Try a top tier of 95% income tax and 95% death tax. Try nationalization of every industry. Seizure of all assets. That democrat rep doesn’t just not believe in private property, he’s opposed to it. As far as he’s concerned everything everybody has is owned by the collective with the leftist elite best able to determine the optimum distribution.
#62,
Addressing de Tocqueville’s warning that, “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” could have, at one time been easily accomplished. A mandatory balanced budget amendment with automatic percentages of revenue assigned to the basics if a budget is not passed and a mandatory debt ceiling tied to revenue would prevent politicians from bribing the public.

It was not done because prior generations of Americans greatly underestimated both the threat from the left and the sheer fiscal irresponsibility of both future generations and its elected representatives. Now it is probably too late to save the republic.

#63,
The majority of the citizens of some states can decide that DC is not legitimate but if the US military backs the ‘duly’ elected government, as is its Constitutional duty, then the game is over for the citizens who’ve decided to resist. An opinion regardless of how sincere, even of the majority in a state, that the government is acting unconstitutionally, won’t sway the military without an overwhelmingly large majority of the entire nation’s citizens vehemently protesting. Tragically, that’s not going to happen in a country that just reelected Obama.

”A Democratic Party-backed judge who won re-election in November while facing battery charges was found not guilty Monday — by reason of insanity.
The insanity verdict could aid the judge’s effort to return to the bench.”

This is the Chicago standard known far and wide.

Read deep into the article — however, please attach seat belt — for you will, otherwise, fall out of your chair.

GB @ 64: “… if the US military backs the ‘duly’ elected government, as is its Constitutional duty, then the game is over for the citizens who’ve decided to resist. … that’s not going to happen in a country that just reelected Obama.”

We have to keep reminding ourselves — Soetero got the affirmative votes of only around 1/3 of US ‘citizens’. Neither he nor we should over-estimate his level of support from the country at large.

Meanwhile, in other news, Drudge reports that Panetta is seeking a cut in military pay. Guaranteed to win the loyalty of the troops, and make them want to turn their guns on their fellow citizens when the Administration demands it.

When we start debating which side the US military is going to come down on in that kind of breakdown of the Consent of the Governed, it is already game over for an Administration which blindly assumes that all those heavily armed guys will automatically always be on its side. The former Shah of Iran might have had an opinion about how good an assumption that can turn out to be.

“Maybe it’s an example of why economic forecasting is an inexact science; of why extrapolating nonlinear system is dangerous and why it may not be such a good idea to print money to forestall an invasion by outer space aliens.”

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

When the great commie, FDR, stole at gunpoint the gold of American citizens, we were started down the road to fiat currency. Wee should dig up his remains and defile them, then scatter them over the sea.

“60. Geoffrey Britain
The alternative to the US dollar is martial law. The feds are not going to allow the states to issue their own currency. It’s a ‘redline’ like land reform in South America. If the states actually try it, which they won’t unless and until fiscal collapse occurs, the feds will tell the states to immediately cease and desist with the threat of the US military to back them up. And, in a fiscal collapse scenario, the US military will back the feds. The ‘duly’ elected Constitutional government.” That would go a long way towards explaining why we’re seeing —

But part of me thinks this is so much Pentagon shock and awe, directed not so much at the people of Miami, Chicago, or Minneapolis, none of which are expected to be hotbeds of secessionism/alternative currency-ism…but shows of force to impress the real folks who count — state lawmakers and county sheriffs. In other words, Uncle Sam says all that talk about not enforcing our gun grab is great but as the Rev. Al says we’ve still got the drones and resistance with assault rifles is futile. Or maybe the helos are practicing particularly with the .50 cal fire in Miami to mow down the EBT hordes when their cards stop working for days and they riot.

Ironic too the above when I consider that an active duty member of the military sneered at me about ‘black helicopters’ and my ‘Ron Paul bull—-’. Well I suppose he had to say that for his minders…

I agree most of the military will back the feds in a collapse scenario, or even go along with martial law. The problem for the D.C. fascists is that it would only take 10-20% of the military, reserves and guard to loot several armories to create mucho problems for them, and said ‘insurrection’ won’t be contained to the war gamed locales of Montana, Wyoming or South Carolina. No one in D.C. is going to feel very safe in that scenario.

#66,
It seems to me that you are only looking at one side of a two sided coin. If only 1/3 of Americans voted for Obama and yet he won the majority of votes, then it conversely means that slightly less than 1/3 of American’s voted for Romney. Which means that a bit more than 1/3 of Americans stayed home, too alienated or apathetic to vote, yes?

Given those percentages, should a fiscal collapse occur, you are not going to get a majority of Americans to protest against the ‘duly’ elected government of the United States when the government of necessity (widespread rioting) declares martial law and then issues a lawful order, as per the Constitution (see #68), forbidding the states from issuing their own currency.

In a martial law situation, the military is going to be focused on maintaining order and is going to look askance at any organized resistance that defies the feds. Justified unhappiness with their treatment is an entirely different matter than defying lawful orders from the highest military command and civilian authorities.

#72,
In a fiscal collapse scenario, it would be incredibly stupid of the government to engage in gestapo tactics precipitating an armed revolution, as that is the action most likely to lead to a collapse of support from the military for the feds.

Not that the left might not jump the gun and do just that but while under martial law; abrogating key portions of the Constitution and issuing new executive orders that nationalize industries, seize control of the internet and require mandatory contributions of the assets of the rich, etc. would do far more to fundamentally transform the nation.

You guy referring to the military that rebuilt Iraq from the ground up?
So when it all gets mucked up and the north side of the Potomac says they’ll impose martial law, what happens when the guys on the other side of the river say – why should you be in charge? Have you not failed in governing? Have you not demonstrated you no longer are in control of the situation? Why shouldn’t we take charge, move the hacks aside, and put it all back together again?

BTW, it’s not the generals, but the middle ranks that count. Most of those middle ranks still understand their oath and loyalty is to that piece of paper not to the man. It’ll break the military because it’ll split. Just like Saddam’s forces, there’ll be units/organizations that could be expected to follow but a lot more that will be iffy if not out right unreliable. Remember the tanks rolled into Moscow when the Politburo ousted Gorbachev. The problem was the military wasn’t going to mow down its own citizens and promptly returned to barracks.

Why do you think they’re socially destabilizing the most effective Western military since Rome? It’s the one obstruction to their ultimate grasp for power.

“…and I do solemnly swear to protect and defend the Constitution of the United States against all enemies foreign and DOMESTIC.” (emphasis mine)
CDR M. Hoskins, USN Ret.
I will have one hell of a choice to make, won’t I? I live in and around military bases on the Virginia side of metropolitan DC. Trust me, many, many officers and men are thinking very hard about what they would do if forced to decide.
FWIW, we actually have two armies and two air forces in this country. The United States Army (USA) is the regular federal army. It includes the Army Reserves. The Army of the United States (AUS) is the National Guard, and reports to the governors of the various states unless LAWFULLY nationalized by the feds. I am not sure, but I believe governors may refuse all or part of a call to nationalization…someone will have to check on that.
At least one state, New York, has a Naval Militia. There are no Marine Corps or Coast Guard elements at the state militia level.
So, will I support and defend the United States or the States United? Is there a legal difference? If a sufficient number of states (37.5) oppose the central forces, are they not, ipso facto, amending the Constitution? When the Situation Hits the Rotating Blades of the Ventilation System, it will be very very messy.
Sounds pretty extreme doesn’t it?
But that is what military and naval officers do, think about the boundary cases. It is called preparedness.
ta

As an aside, is there Anything Happening Neal Stephenson hasn’t already predicted?

The virtual to real currency was an integral part of REAMDE. The effective collapse of any over-the-table employment into only a public sector was integral to Snow Crash. His nation-states devolving into ethnic tribes with competing values is integral to Diamond Age. Dozens of throw-away bits in Cryptonomicon were true, including trying to get rich of pinoy-grams, and if we could just build his Illustrated Primer, we’d never have another school.

I agree with those who assert that there will be no state currencies unless there is a hot civil war and then all bets are off- and probably in that situation state currencies would be worthless as well.

But the thing is you’ve got to hand it to the Bernank- he really has manipulated the markets far more than I could have ever imagined, but that said – the repercussion from that manipulation when it all comes undone are going to be a real bitch.

There is a really easy way to counter the Collectivist in Chief’s call for more taxes – point out the percentage of tax revenue to GDP. Under Buraq Hussein, those percentages are 2009 ( 15.1%), 2010 (15.1%), 2011 (15.4%) and 2012 ( 15.8% estimated) – by far the lowest percentages since WWII. Nothing even close. This happens because the US tax structure is addicted to having the wealthiest among us make lots of money, and when they don’t ( like now) total revenue tanks.

These percentages are a clear symptom of a sick, hobbled economy infected by the disease of over-regulation and over taxation. If the economy was performing normally, you could easily see an additional three percent of revenue- or roughly a half a trillion dollars a year cut from the deficit, and that doesn’t even account for the growth a normal economy would have. So the way to raise revenue is not to raise tax rates, but to cut regulation and heal the economy!

Certain states California,Nevada, Alaska have mines of gold/silver/copper.

What would, for example Texas make a coin of since it’s mineral resources are oil not metal? (Despite the legend of the Lone Ranger there is not a silver mine anywhere in Texas)

Worse what about a state like Kansas that only have resources like wheat and dirt?

I can see that this would cause considerable problems in places.

I guess that metallic coins could be made from any available metal and thus could be recycled aluminum cans since aluminum has an actual value but holy cow I’d hate to see the pocket needed for a $100.00 in aluminum coins at what .20 cents an ounce?

Eggplant @ 62 – You are right, the Cowardly Lion was Bert Lahr, but his speech “Courage” does hit the spot. Please note that Albee built it, Joe Kennedy bought and “flipped” it to RCA forming RKO Pictures, and it was downhill all the way after that for what came to be known as the studio system. The Second Law strikes again. Albee’s career almost perfectly matches the existence of vaudeville, he was there at the start and the finish.

But today’s topic will be the State of the Union (SOTU). I’d make this observation, by passing Obama’s debt ceiling increase and supporting his sequestration plan, including the DoD cuts, the Republicans are now in a position to lead from behind by “bump drafting”.

Oli-Bama and his Forty Thieves will be totally clueless about this favorite NASCAR trick! The Republicans have him right where they want him, leading from the front. Anyone who’s seen the finish at Daytona or Talladega knows that Obama is “dead meat”!

In other news, “the U.S. Postal Service, struggling under a financial load and facing tough competition, will stop delivering mail on Saturdays beginning this summer, officials announced.”

The root cause of reluctance to fix things by cutting spending (translation: firing vast swaths of public employees) isn’t ideology. It is removal of the opportunity to purchase votes, in exchange for the gravy train continuing for millions of public functionaries.

Having said that, there is another large elephant in the room that nobody wants to talk about. Much in the same way The Onion parodied the end of the world affecting women and children worst (simply because they statistically comprise more than half the world’s population), there is the all-too-real spectre of spending cuts unequally affecting the population along racial lines.

The percentage of blacks who have been able to leave poverty and enter the middle class through public employment is roughly 80%, much of that affirmative action hiring. Forty percent of the USPS workforce is black, for example, and cuts will therefore affect blacks at a rate roughly four times more harshly than their percentage of the general population. I’m guessing that across government employment generally this will play out if cuts are made. Certainly the professoriate will claim that this is de facto racism because of The Onion parody dynamic, logically ridiculous though that might be. But perhaps the greater force is the SWPL and other urban leftist whites fear that such an economic dislocation will make their happy yuppie urban playgrounds in state capitals and other cities with a large public sector presence dangerously filled with disaffected and angry and newly poor blacks prone to crime and rioting. Keeping blacks employed thusly by the government is a form of appeasement.

Politicians have tapped into this danegeld mentality that exists among urban white populations – just give blacks public jobs and an easy paycheck and they’ll keep quiet and safe and my pseudosophisticated voter and contributor base will keep me voted into office.

Pretty sickening stuff. Worse, it is another example of the bigotry of diminished expectations that prevails among leftists living in the U.S.

GB @ 74: “If only 1/3 of Americans voted for Obama and yet he won the majority of votes, then it conversely means that slightly less than 1/3 of American’s voted for Romney. Which means that a bit more than 1/3 of Americans stayed home, too alienated or apathetic to vote, yes?”

Exactly. But don’t assume the third of US ‘citizens’ who did not vote are apathetic. Some undoubtedly are. Many fit into the category of “Contingent Voters”. Given the choice between Tweedlesoetero and Tweedleromney, they express their disgust by staying home. Give them a Reagan, and the Contingent Voters will be at the polls with bells on.

Which brings us back to the subtext — All government relies ultimately on a monopoly of violence, the so-called Police Powers. For the most part, the individuals exercising that power of violence are not members of the Ruling Clique, not even members of the Nomenklatura. In Leninist terms, they are considered to be the Useful Idiots.

When push comes to shove, will human beings who are looked down upon by the Beautiful People murder their fellow citizens to enforce the will of the aforesaid Beautiful People? If the Ruling Clique ever put the ordinary soldier in the position of having to make that choice, then the Ruling Clique will already be toast.

FWIW: Alternative currencies are alive and well in America today. So, count me as unsurprised by their proliferation.

Pardon the hear-say, but, a friend working in a tourist town in a Western state tells me his town trades in what he called “locals’ tokens.” These chits are exchanged like cash for services among the towns’ business owners and employees.

Funny thing is, some towns in America have been trading in these currencies for centuries. For example, company towns were common in Western North America’s development, and those that sprung up around company railroad stops and mineral finds used paper credits liened against wages to trade in the town’s company commisary.

So, what Utah and other states are ‘permitting’ is really a common, traditional, American practice that they couldn’t stop if they wanted to.

When push comes to shove, will human beings who are looked down upon by the Beautiful People murder their fellow citizens to enforce the will of the aforesaid Beautiful People? If the Ruling Clique ever put the ordinary soldier in the position of having to make that choice, then the Ruling Clique will already be toast.

The Left is working on that, assiduously. West Point cadets are being taught by a lefty crank that the Right is dangerous and “Anti-Federalist.” This is a new term to supplement the “anti-government” canard, and it turns the meaning of “federalism” on its head.

Police forces are unionized, and will be told that any groups of citizens they are directed to attack with force are a menace. There is also a rumor — still just a rumor — floating around that a new “litmus test” for advancement of higher-ranking military officers is whether or not they are willing to order soldiers and Marines to fire upon fellow Americans.

Would there be dissension among the lower ranks? Probably, but it would not be universal, and would not come right away. I would say that the most likely “dissenters” would be Guard units and sheriff’s deputies in rural areas.

Don R @ 88: “… a new “litmus test” for advancement of higher-ranking military officers is whether or not they are willing to order soldiers and Marines to fire upon fellow Americans.”

Could be. However, there is a term with which West Point graduates who study military history will be familiar: fragging.

Organization requires the Leaders and the Led. As our host pointed out in this post, those of us on the “Led” side of that equation are having increasing doubts about the competence of our would-be “Leaders”. Not a comfortable situation for the “Leaders” when the “Led” carry the weapons.

Good points. I imagine that many of the cadets in that charlatan’s class are getting an earfull when they go home for holiday breaks, or are even complaining to Mom and Dad. Many lower-ranking officers have expressed alarm and outrage over these “classes.”

And as I pointed out: the further away from DC the military and police are, and the more they are immersed in their communities, the less susceptible they are to draconian orders from top brass.

We are right on the edge of a monetary revolution. It was discovered long ago that voters can be bribed with payments from the treasury. The politicians have now discovered that the treasury can issue endless amounts of cash for those bribes without consequence. The major Fed policy now is the purchase of short term debt with long term debt. The guys running the monetary system now are not seriously looking for debt to be paid from tax revenues. Half the adult population is not subject to direct taxation. Why do they keep harassing the rest of us? Apparently they feel it is necessary to maintain the illusion that repayment of the funds borrowed for government expenditures are going to be repaid in taxpayer-earned funds instead of newly created fiat funds.
The big dilemma has always been that money is not value. Keeping cash in a stable relationship with value is an elusive goal. That relationship is established in fact in billions of time a day in transactions between people. Getting the cash to reflect the underlying assumptions in those transactions is very difficult because the process is a feedback loop that is affected by countless other extraneous factors.
However, the current leadership believes that money is value and not simply representative of value. The unequal distribution of this “value” is immoral and criminal. The difference between rich and poor is an evil plot easily cured by issuing new money in direct deposits to service vendors like health service providers and EBT cards; budgets and debt limits are foolish gimmicks to freeze out the poor and protect the rich.
Baseball is in a quandary of value right now when players with all-time records are not admitted to the Hall of Fame. A home run by Babe Ruth is seemingly worth more than a home run by Bonds. The asterisk is a devalued currency. If we were somehow able to amass all the gold ever produced in the history of the world, at its current price it would only pay off about half the $16 trillion debt. It will not be possible to raise sufficient dollars from taxation to repay debt in a timely manner without devaluation through inflation.
The secret of the dollar is almost out there in the open. The half-serious discussion of the trillion dollar coin to evade the debt limit is an indication. The new treasury secretary will sign new dollars with a “fuck you” signature reflecting his policies. Revision of the tax code to allow everyone to avoid income taxes would acknowledge what the administration believes: Value is created by the treasury issuing money and not by people creating goods and services. As the new Chairman of the Council of Economic Advisors Madoff says, “Everything is fine until a few bastards drop out and ruin it for everyone.”
The monetary revolution will occur when the world accepts the new definition of printable “value.” The world will, and our Dear Leader may succeed, if the dollar continues to be backed by the chimera of America as the source of stability and the ideal that the world aspires to even if they hate it. The fatal debasing of the currency is the destruction of America as an ideal and superpower. The irony of that fact is immense and utterly lost on Dear Leader, whose own goal assures its own failure.

Well, the left’s constant demonization and marginalization campaign has been bearing some fruit lately. We have the FRC shooter who just admitted that he got his target list from the SLPC’s “Hate Map”. How convenient. And the recent revelation that a college student who shot up some white women learned his hate at university, and was just trying to teach whitey a lesson in tolerance. Finally, the rogue LAPD killer cop has a screed with all of the usual leftist tropes, including the unsurprising and not-ironic call for gun control (Add that to the rapist in Dayton, Ohio also advocating for gun control…gee I wonder why rapists and murderers want others disarmed?).

With a hat tip to the scifi classic story, “And Then There Were None”?

Thank you for the link to that story, which I haven’t quite finished yet. I read a lot of science fiction anthologies as a kid and sort of remember reading that story, oh, half a century ago. Perhaps it did plant a seed. I do like the “Ob” — an expression that by the end of the novel I would have unknowingly used. Before I finish reading the story, I’d like describe my own use of the term.

The name of the novel is The Ironic Storm. Irony has become a World Historical Force. The copper penny is made of Zinc. The solid gold bar has a heart of tungsten. The regulatory state that is sold as ensuring trust and “fairness” ends up destroying trust with quite unfair results. The Fed — what’s it suppose to do again?

Naturally when everyone is working to prevent global warming a new Ice Age occurs, and occurs naturally. In the story “ice” is a metaphor for freezing the economy and the society. At first people try to remove the ice and work through the ice but soon there is so much of it they try to get above the ice. The ice becomes the new plane of their existence. They begin to mine the ice for valuables trapped below the ice. They butcher what they find looking for the choice cuts. They begin to build structures with the ice and then they want to preserve the ice that supports the structures. It cannot last but for now it is what keeps them alive.

The big enemy becomes the thaw. Some dread day the warm rains will come. Though the ice is solid water, at first the water will not penetrate the ice. The ice sheds the water but even as it sheds the water it becomes the water and it all runs free and what do you do with all that free running water? Will it sweep you away? Or can you make of use of it?

The big freeze creates a low trust environment. Ironically, this low trust environment creates “The Trust.” The Trust is an economic organization that develops among people with long standing relationships. It’s aimed at basic survival for them and the community of people around them, too. The relationships are voluntary but in truth many people have little choice but to go along. The situation is not the fault of The Trust but there are those who will blame The Trust for the situation.

The Trust develops a currency called “The Obligation.” The Obligation is like a futures market for promises. Some people’s promises are not worth anything and they don’t get to play. Some people’s word is their bond and they don’t need a bond. Some people’s word is almost like their bond and they need a bond to make up the difference. A good reputation produces added interest. You need skin in the game to play. But all the relationships are voluntary.

The currency would expand and contract according to the outstanding number of obligations. What might be needed is a gold standard obligation. “I would accept four of his but I will need five of hers” type of deal. I hope I got the “his” and “hers” right. Of course this sounds terribly unfair but it only sounds that way. After all, it’s voluntary. The penalty for not meeting your obligations — in addition to losing your bond — is shunning.

There are other currencies in circulation (in fact those currencies are the ones that circulate). The Pirate’s dollar is one of them (it started as the “copper” penny backed dollar). But the only currencies with actual value are backed by the Obligation.

The Obligation in the novel does have an authority involved (which does not seem to be the case in Russel’s story). This is a Korean housewife who lives in the Midwest and keeps track of it all on her laptop computer. Destroy her and the laptop and you will get rid of all Obligation.

Police in Torrance CA engaged in manhunt for crazed ex-cop, shoot two elderly Asian women who were delivering newspapers because their truck was similar to that used by the suspect, Christopher Dorner.

All this talk about currencies is enlightening but remember what really matters. You can’t eat precious metals so one MRE may be worth a gold bar some day. I prefer investing in semi-precious metals like brass and lead. With those metals, and a stash of food and water, I am more likely to survive the collapse than King Midas. If you don’t already know a farmer you might want to befriend one and make sure you have a skill he would appreciate.

“Anyone receiving payment in Amazon coins would theoretically be able to live entirely within the economy of the retail giant. Presumably the Amazon coins would entitle him to purchase MRES, canned bacon and anti-radiation pills and whatever else is on offer at Amazon.”

Not so fast there. If or when the dollar crashes, Carl Consumer isn’t going to be able to _get_ his stuff unless a whole lot of other people and organizations get in on the deal. The warehouse, and everything it takes to keep one open, the logistic train that gets the stuff from warehouse to consumer (and the people who fuel, service, and administer the equipment). Not to mention the people who _make_ the stuff that fills up the warehouse. And the people who run ISP and the ‘internet’ …

But the point I came here to make was that Carl Consumer is at the long end of a computer mediated infrastructure. And I don’t know how you could switch that over from ‘dollars’ to Amazon Credits or even Bitcoins.

Presumably, one system at a time, a lot of guys working overtime to make it happen. If we keep switching currencies, we’d get good at it, or someone would hack a conversion utility on the web to trade ‘amazon credit’ or bitcoins for Boeing Bucks.